App and music store licensing in SA: Copyright and licensing

Digital Content

What is holding back digital stores, such as Apple’s iTunes, in South Africa?

Getting the license agreements in place to sell content such as music and apps seems to be the greatest hurdle for a digital store in South Africa.

While many have blamed organisations such as the Recording Industry of South Africa (RiSA) and the Film and Publications Board (FPB), both organisations have offered good answers to the allegations made against them when it comes to digital content.
Video games on digital content delivery systems

For example, the FPB is responsible for giving age restrictions to not just movies and books, but video games as well. As such, the lack of games in the Apple App Store was laid at their feet.

However, the FPB explained that no game developer or publisher, nor Apple had approached them to express concerns with South Africa’s ratings system.

Curious about why platforms such as Steam and the Android Market don’t seem to have any qualms about delivering content in South Africa, we asked Nicholas Hall from Michalsons Attorneys for his take on the issue. According to Hall, there is an argument for online stores like Steam to be exempt from FPB ratings requirements if they deliver their content through a network provider with an ICASA license.

Considering that many Internet service providers have their own Steam servers and ECNS licenses, Steam could be considered exempt from needing FPB ratings for the games it sells.
Digital music

Another oddity in South Africa is the lack of music on a large online store such as iTunes while Nokia’s Ovi Music and DStv’s OMusic sell music from international and local artists.

RiSA’s operations director, David du Plessis, said that they don’t enter into the picture at all when it comes to license agreements for online stores to distribute content. Negotiations between aggregators like Nokia and rights holders are not conducted on a collective basis, but individually, du Plessis explained.

Such licensing agreements, conducted across most creative industries, are usually quite an in-depth and involved process, said Nokia service manager, Dominique Silva.

Silva explained that to get local artists on the store we have structured agreements with a few key local digital content distributors; sometimes key labels, sometimes a company with a collection of labels and independent artists.

“We do this so our local artists can come as direct to us as possible and so local labels and artists make as much money from the deal as possible,” said Silva. “If an artist is keen to get on the store, we usually guide them to a selection of content distributors, both local and international, so they can investigate and then select a distribution deal that suits them. This is usually this quickest and most effective way of getting them on to the store.”

If getting content available through international digital stores is just about licensing agreements, then perhaps something else has hamstrung the process.

Something like South Africa’s 33 year old copyright act, for instance.
So what is holding back digital music distribution?

Not so, according to both RiSA and Nokia.

Du Plessis said that in his personal opinion, the digital divide in the country is more likely to make investors think twice, than any perception that may exist about South Africa’s copyright legislation, and that our copyright legislation as it currently stands, does not serve as any barrier of entry.

Nokia’s Silva also said that getting the rights to sell music locally is not more complicated, but similar to other license agreements.

Silva went on to list three hurdles to digital content distribution that apply to SA:

   1. Globally, music licensing is a difficult process.
   2. Education of both the artists and labels: When a new album is released, everyone in the chain needs to be much more aggressive in pushing and promoting the digital channels for music – from the retailer to the artist.
   3. Cost of data and bandwidth.

To the first barrier, Silva said that getting the license agreements is always tricky, but that they have tried to make sure that they streamline it as much as possible and make sure as much money goes to the local label, and hopefully therefore the artist, as possible.

Secondly, Silva said that online retailers can push as hard as they like, but the artists and labels themselves need to push their digital releases as hard as their physical releases to make sure customers buy their music legally.

Finally, cheaper data and bandwidth would go a long way to increasing the consumptions of digital music, “As with so many other digital businesses in South Africa,” Silva said.